Internap Names New CFO

Internap Network Services (INAP) said today that it has named George E. Kilguss III as Chief Financial Officer. The appointment is seen as a key step in restoring investor confidence after significant problems integrating Internap's $217 million acquisition of Vitalstream last year. In early trading on the NASDAQ market, Internap is up 29 cents to $5.01, a gain of about 6 percent.

On March 19 Internap shares lost a third of their value after reporting that it would delay filing its annual report with the SEC as it sorted out up to $2 million in customer credits related to service outages on the Vitalstream CDN network.

Kilguss previously served as CFO of Towerstream Corp., where he oversaw the company's initial public offering, and as CFO at Stratos Global Corp., which completed seven acquisitions over four years that grew revenues from $3 million to $300 million. Kilguss' experience in financial oversight of integrations will be of interest to Internap investors.

"George's skills and experience as a seasoned CFO with publicly traded, high-growth technology companies, combined with his hands-on knowledge of the financial markets, will help drive Internap's expansion into new areas," said Internap CEO James DeBlasio. "George has significant and relevant sector expertise, specifically in telecommunications and wireless that will be beneficial to our growth."

"I appreciate the confidence placed in me by Jim DeBlasio and I am excited to be joining the Internap team," said Kilguss. "Working together, we will drive the operational efficiency, management systems and product innovation to expand our existing customer relationships and grow into new markets."

Kilguss will start April 7, after the company is expected to complete the filing of its 10K with the SEC. Internap said the credit requests from Vitalstream customers weren't received until early 2008, although customer complaints surfaced on blogs and news sites last fall (links via Nortia Research).

A newsletter mailing today from Internap offers a free month of CDN services for new customers, touting the Vitalstream acquisition and noting that "Streaming media doesn't stream, when your network doesn't work."